The procedure to calculate the standard deviation of investment returns (σ) involves five steps: (1) subtract the expected return from each possible return to find the deviation for each outcome, (2) square each deviation, (3) multiply each squared deviation by the probability of its corresponding outcome, (4) sum all the weighted squared deviations, and (5) take the square root of the result.

Authors

• Person: Not available Organization: Pressbooks
  Chapter 8 – Risk and Return – Fundamentals of Finance

Sources

• Chapter 8 – Risk and Return – Fundamentals of Finance pressbooks.pub Pressbooks via serper

Referenced by nodes (2)

• investment return concept
• Standard deviation concept